An error occured. Details Hide
You have unsaved pages. Restore Cancel

Corporate growth strategies typically include some combination of deepening existing market penetration and new product and market development. New market entry through acquisitions, greenfield investment, joint venture or other forms are considered generally to be the most controllable ways to drive business growth. And, many emerging markets, such as Brazil, India, Argentina, with their growing middle-classes are attractive targets for these growth strategies.

 

With the ever-increasing complexity underlying trade openness, regulatory, and tax systems, among other factors globally, identifying the best target markets for a specific company remains part science, part art. Market attractiveness assessments cover demand, value chain, competition, innovation, regulatory environment, barriers to entry, risks, and security issues, among other critical measures. Companies also rely on composite metrics to compare markets across several dimensions simultaneously during the early stage of analysis preceding detailed analyses. One such metric is the Market Potential Index (MPI) published by Michigan State University.

  • The MPI is a composite indicator assessing a country's market potential across eight dimensions: market size, intensity, growth rate, consumption capacity, receptivity, commercial infrastructure, economic freedom and country risk. Each dimension is based on several indicators. For example, market size is based on the size of the urban population and the volume of electricity consumption whereas GNI per capita and private consumption serve as proxies for market intensity.
  • According to the MPI, in 2017, China was the most attractive market in the world for the fourth consecutive year. Hong Kong, India, Canada, and Japan also made the top 5.
  • Many countries in the top of the ranking are developed European countries. Brazil has steadily fallen in the ranking according to market attractiveness, dropping from 11th in 2010 to 35th in 2017.

In today’s Viz of the Day we provide access to several key metrics commonly used in market attractiveness assessments, highlighting China as an example of how the metrics provide insight for business analysts. China has been a popular target of market attractiveness studies for more than two decades, with companies timing entry, level of investment, and market strategies to coincide with regulatory and market growth expectations.

Opportunities. China’s enormous market size and related market growth potential are key factors in its attractiveness. While market growth is gradually cooling, the Chinese economy is still among the top 10 fastest growing economies worldwide. Over the last five years, China’s real GDP grew at an average annual rate of 7.2 percent.

Weaknesses and obstacles. Limited internet access along with low market intensity and receptivity as well as living standards remain persistent challenges for China. Restrictions on economic freedom frequently reach headlines as well based on constraints on the flow of investment capital and the financial sector's dependence on and susceptibility to government control and interference, according to the Heritage Foundation.

  • Only 53 percent of the population in China has Internet access. In addition, international Internet bandwidth is among the lowest in the world, trailing behind countries such as Liberia, Iran, Namibia, and India.
  • In addition, China’s market receptivity—e.g. openness—approximated by its foreign trade as a share of GDP is among the lowest in the world.
  • Living standards in the country are also still low despite rapid economic growth, with a per capita income lower than Russia, Mexico, and Argentina.

Related Data Insights

Which US States are Small Business Friendly?

Small businesses in the United States are engines of the American economy, employing nearly 20 percent of Americans. So, what makes one state more small-business friendly than another? The results are in from the Thumbtack Small Business Survey—the largest continuous study of small business perceptions of government policy in the US—and may even surprise you if you associate big cities and large population centers with small business opportunity.    #1 South Dakota. Spanning geography and climate, the most friendly states were South Dakota, Tennessee, Alaska, Michigan, and Utah, all earning an overall A+. South Dakota...

Global Entrepreneurship Index 2018

Ecuador has the world's highest share of nascent entrepreneurs per capita at about 30 percent of the population. This measure is known as total early-stage entrepreneurial activity (TEA). But, does this mean that Ecuador is more entrepreneurial than the United States, which has a TEA of only 14 percent? The answer depends on how we define “entrepreneur”.  One key global economic growth driver is the ability of an entrepreneur to bring a concept to market, adding to national income, providing new goods and services, and creating jobs. In doing so, innovative entrepreneurship contributes to the foundation of a stable and...

The Panama Papers: Key Statistics

The Washington, DC-based International Consortium of Investigative Journalists (ICIJ) has released a database of the so-called Panama Papers - information leaked primarily from Mossack Fonseca, one of the world's leading global law firms providing services of incorporation of offshore entities and headquartered in Panama. The leak is the largest ever of offshore financial records and contains about 11.5 million legal and financial records dating back more than 40 years.  The files expose more than 213,000 offshore entities created in 21 jurisdictions, stripping away the secrecy from the offshore holdings of 238,000 people...

Apple iPhone Sales Worldwide

During the second quarter of 2016, Apple sold 51.2 million iPhones worldwide. This is a decrease of 16.3 percent, or about 10 million units, compared to the same quarter in 2015. While all other major Apple products - iPhone, iPad, and iMac - likewise experienced negative year-on-year sales growth during the second quarter, the iPhone is uniquely critical to revenue growth for Apple, accounting for 78 percent of sales volume and 65 percent of sales value for the company. The bad news did not end there for the global brand, with deteriorating performance in total revenue, most geographic segments, and select other...